G&G Closed Circuit Events, LLC v. Single, LLC

Opinion

1 2

3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 10 G&G CLOSED CIRCUIT EVENTS, CASE NO. C18-1295JLR LLC, Plaintiff, PARTIAL SUMMARY 12 v. JUDGMENT

13 SINGLE, LLC, et al., 14 Defendants. 15 I. INTRODUCTION 16 Before the court is Plaintiff G&G Closed Circuit Events, LLC’s (“G&G”) motion 17 for partial summary judgment. (See Mot. (Dkt. # 20); see also Reply (Dkt. # 25).) 18 Defendants Single, LLC, Joel Cendejas, and Jesus Cendejas (together, “Defendants”) 19 oppose the motion. (See Resp. (Dkt. # 21).) The court has considered the motion, the 20 parties’ submissions in support of and in opposition to the motion, the relevant portions 21 // 22 1 of the record, and the applicable law. Being fully advised, the court GRANTS in part and 2 DENIES in part G&G’s motion.1

4 This is a commercial piracy case arising out of the allegedly unlawful broadcast of 5 Gennady Golovkin v. Saul Alvarez IBF World Middleweight Championship Fight 6 Program (hereinafter, the “Program”).2 (See Compl. (Dkt. # 1) ¶¶ 16-21, 23-31.) The 7 Program was telecast nationwide on Saturday, September 16, 2017. (Id. ¶ 23; Gagliardi 8 Decl. (Dkt. # 20-2) ¶ 4.) G&G purchased and retains the exclusive commercial

9 exhibition licensing rights to the Program. (Gagliardi Decl. ¶ 4.) 10 It is undisputed that Arturo’s Mexican Restaurant—a restaurant in Des Moines, 11 Washington, owned by Single, LLC—broadcast portions of the Program without 12 authorization on September 16, 2017. (See Kemppainen Aff. (Dkt. # 20-4) at 1; Resp. at 13 2 (conceding that Arturo’s Mexican Restaurant broadcast the Program).) G&G’s

14 investigator states that he entered Arturo’s Mexican Restaurant on September 16, 2017, 15 and was not charged a cover on entry. (See Kemppainen Aff. at 1.) He purchased one 16 drink at the restaurant. (Id.) The investigator saw six TVs in the restaurant, one of which 17 was showing one of the undercard bouts from the Program. (Id.) He counted between 10 18 //

20 1 Neither party requests oral argument (see Mot. at 1; Resp. at 1), and the court does not consider oral argument to be helpful to its disposition of the motion, see Local Rules W.D. Wash. LCR 7(b)(4). 21

2 The Program includes the undercard bouts and commentary encompassed in the 22 television broadcast of the event. (See Compl. ¶ 23.) 1 and 15 patrons at the restaurant, and left the restaurant after only seven minutes. (Id. at 2 2.)

3 Joel and Jesus Cendejas own and manage Single, LLC. (See Joel Cendejas Decl. 4 (Dkt. # 22) ¶ 3; Jesus Cendejas Decl. (Dkt. # 23) ¶ 3.) Arturo Cendejas—Joel and Jesus’s 5 brother—founded Arturo’s Mexican Restaurant but returned to Mexico and transferred 6 the restaurant to Single, LLC, in 2016. (See Joel Cendejas Decl. ¶¶ 2-3; Jesus Cendejas 7 Decl. ¶¶ 2-3.) After returning to Mexico, Arturo Cendejas continued to manage some of 8 the accounts for Arturo’s Mexican Restaurant, including the restaurant’s DirecTV

9 account. (See Joel Cendejas Decl. ¶¶ 4-5; Jesus Cendejas Decl. ¶¶ 4-5.) Defendants 10 acknowledge that the DirecTV account that the restaurant used was in the name of an 11 individual, Adrian Martinez, instead of a business or Single, LLC’s name. (See Orr Decl. 12 (Dkt. # 20-3), ¶ 2, Ex. 2 at 4, 13, 22; Resp. at 2 (stating that Arturo Cendejas had “cut a 13 corner in respect to [the DirecTV account], which, it turns out, is in the name of his friend

14 Adrian Martinez”).) Joel and Jesus Cendejas state that they did not know that the account 15 was in the name of an individual; in fact, both claim that they “didn’t know anything 16 about [the DirecTV] account.” (See Joel Cendejas Decl. ¶ 5; Jesus Cendejas Decl. ¶ 5.) 17 According to Jesus Cendejas, it was Arturo’s idea to purchase the Program.3 (See 18 Jesus Cendejas Decl. ¶ 9.) Specifically, Jesus remembers that Arturo spoke to him

19 20 3 Defendants’ response states, without citation, that “Arturo ordered the [P]rogram.” (Resp. at 2.) However, the evidence before the court does not clearly indicate who ordered the 21 Program. Jesus and Joel Cendejas indicate that Arturo Cendejas managed the restaurant’s DirecTV account (see Joel Cendejas Decl. ¶¶ 4-5; Jesus Cendejas Decl. ¶¶ 4-5), and Jesus recalls 22 that it was Arturo’s idea to buy the Program (Jesus Cendejas Decl. ¶ 9), but Jesus does not state 1 “about wanting to buy a pay-per-view for a boxing match.” (Id.) Joel Cendejas, on the 2 other hand, did not know that the restaurant would be showing a boxing match on TV.

3 (See Joel Cendejas Decl. ¶ 8.) Neither Joel nor Jesus recalls seeing the Program on TV at 4 the restaurant or seeing anyone looking at the TV screen that was showing the Program. 5 (See id. ¶¶ 8, 11; Jesus Cendejas Decl. ¶ 8, 11.) They both state that Arturo’s Mexican 6 Restaurant did not advertise that it would be showing the Program or take in any unusual 7 amount of money on the day of the Program. (See Joel Cendejas Decl. ¶¶ 10, 12; Jesus 8 Cendejas Decl. ¶¶ 10, 12.) Finally, both Joel and Jesus claim that they “didn’t get any

9 money out of” showing the Program. (See Joel Cendejas Decl. ¶ 12; Jesus Cendejas 10 Decl. ¶ 12.) 11 G&G brings three claims against Defendants based on the broadcast of the 12 Program: (1) unauthorized publication or use of communications in violation of 47 13 U.S.C. § 605; (2) unauthorized reception of cable service in violation of 47 U.S.C. § 553;

14 and (3) trespass of chattel. (Compl. ¶¶ 22-39.) 16 G&G moves for partial summary judgment on two issues: (1) liability against all 17 Defendants on G&G’s claim for unauthorized use of communications in violation of 47 18 U.S.C. § 605; and (2) liability and damages on G&G’s claim for trespass to chattels. (See

19 Mot. at 1-2.) The court address each issue in turn. 20 // 21

that Arturo ordered the Program (see generally id.). Thus, the only evidence regarding who 22 ordered the Program comes from the unverified statement in Defendants’ response brief. 1 A. Legal Standard 2 Summary judgment is appropriate if the evidence, when viewed in the light most

3 favorable to the non-moving party, demonstrates “that there is no genuine dispute as to 4 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. 5 P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. Cty. of L.A., 6 477 F.3d 652, 658 (9th Cir. 2007). The moving party bears the initial burden to show 7 there is no genuine issue of material fact and that he or she is entitled to prevail as a 8 matter of law. Celotex, 477 U.S. at 323. If the moving party will bear the ultimate

9 burden of persuasion at trial, it must establish a prima facie showing in support of its 10 position on that issue. UA Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th 11 Cir. 1994). That is, the moving party must present evidence that, if uncontroverted at 12 trial, would entitle it to prevail on that issue. Id. at 1473. If the moving party meets his 13 or her burden, then the non-moving party “must make a showing sufficient to establish a

14 genuine dispute of material fact regarding the existence of the essential elements of his 15 case that he must prove at trial” to withstand summary judgment.4 Galen, 477 F.3d at 16 658. 17 // 18 //

19 20 4 The same standard and procedural rules apply to motions for partial summary judgment. See Fed. R. Civ. P. 56(a); Lies v. Farrell Lines, Inc., 641 F.2d 765, 768 (9th Cir. 1981) (noting 21 that, on a motion for partial summary judgment “the moving party has the burden of showing that there is no genuine issue as to any material fact and that he is entitled to a partial summary 22 judgment as a matter of law”). 1 B. Unauthorized Use of Communications 2 Defendants concede that Single, LLC, is liable on G&G’s claim for unauthorized

3 use of communications under 47 U.S.C. § 605(a). (See Resp. at 2 (conceding liability for 4 Single, LLC, under 47 U.S.C. § 605(a).) However, Defendants oppose partial summary 5 judgment as to Joel and Jesus Cendejas’ liability under 47 U.S.C. § 605. (See Resp. at 2.) 6 Accordingly, pursuant to Defendants’ concession, the court GRANTS G&G’s motion as 7 it relates to Single, LLC’s liability under 47 U.S.C. § 605(a), and addresses Joel and 8 Jesus’s individual liability.

9 The Communications Act of 1934, 47 U.S.C. § 605, “prohibits the unauthorized 10 receipt and use of radio communications for one’s ‘own benefit or for the benefit of 11 another not entitled thereto.’” DirecTV, Inc. v. Webb, 545 F.3d 837, 844 (9th Cir. 2008) 12 (quoting 47 U.S.C. § 605(a)). “[L]iability under [S]ection 605 requires proof that a 13 defendant has “(1) intercepted or aided the interception of, and (2) divulged or published,

14 or aided the divulging or publishing of, a communication transmitted by the plaintiff.” 15 Cal. Satellite Sys. v. Seimon, 767 F.2d 1364, 1366 (9th Cir. 1985) (quoting Nat’l 16 Subscription Television v. S & H TV, 644 F.2d 820, 826 (9th Cir. 1981)). A party 17 aggrieved under Section 605 may, at its discretion, recover either actual or statutory 18 damages. 47 U.S.C. § 605(e)(3)(C).

19 Although the Ninth Circuit does not appear to have weighed in on the issue, 20 “[m]ost, if not all, courts addressing the issue of individual liability under . . . Section 605 21 have applied a standard of individual liability premised on copyright law.” Joe Hand 22 Promotions, Inc. v. Bragg, No. 13-CV-02725-BAS JLB, 2014 WL 2589242, at *5 (S.D. 1 Cal. June 10, 2014) (collecting cases). Under this standard, a plaintiff must show “(1) the 2 individual had a right and ability to supervise the infringing activities and (2) had an

3 obvious and direct financial interest in those activities.” J & J Sports Prods., Inc. v. 4 Walia, No. 10-5136 SC, 2011 WL 902245, at *3 (N.D. Cal. Mar. 14, 2011). In order to 5 satisfy the first prong, a plaintiff “must allege more than the shareholder’s right and 6 ability to supervise generally.” Id. The plaintiff “must allege that the defendant had 7 supervisory power over the infringing conduct itself.” Id. Furthermore, to satisfy the 8 second prong, “a plaintiff cannot merely allege that the shareholders profit in some way

9 from the profits of the corporation.” Id. In other words, “an individual’s status as a 10 shareholder or officer is insufficient to show that he or she had the requisite supervision 11 authority or financial interest to warrant individual liability.” Id. “[I]n order to hold a 12 shareholder of an [limited liability company (“LLC”)] liable for the LLC’s infringing 13 conduct, a plaintiff must allege facts that show the shareholder was ‘a moving active

14 conscious force’ behind the infringing act itself and that the shareholder derived direct 15 financial benefit from the infringing conduct above and beyond a generic linkage 16 between the profits of the shareholder and those of the LLC.” Id. 17 The court concludes that there are genuine disputes of material fact that preclude 18 summary judgment on Joel and Jesus Cendejas’ individual liability. The undisputed

19 evidence currently in the record shows that Joel and Jesus Cendejas are members of 20 Single, LLC (see Answer (Dkt. # 12) ¶ 12), and managers of Arturo’s Mexican 21 Restaurant (Orr Decl. ¶ 4, Ex. 1 at 2, 7). Both Joel and Jesus admit that they were present 22 at the restaurant and supervising employees on the night that the restaurant broadcast the 1 Program. (See id. at 4, 9.) Jesus admits that he knew in advance that his brother, Arturo, 2 wanted to purchase the Program for broadcast at the restaurant. (See Jesus Cendejas

3 Decl. ¶ 9.) 4 Although the foregoing evidence favors finding Joel and Jesus Cendejas 5 individually liable for violating Section 605, other evidence in the record establishes 6 genuine disputes of material fact that must be resolved at trial. The undisputed evidence 7 in the record establishes that Arturo Cendejas manages the DirecTV subscription at 8 Arturo’s Mexican Restaurant and Joel and Jesus had essentially no knowledge or control

9 over the account. (See Joel Cendejas Decl. ¶¶ 4-5; Jesus Cendejas Decl. ¶¶ 4-5.) 10 Although Jesus recalls speaking to Arturo in advance about Arturo’s desire to order the 11 Program (Jesus Cendejas Decl. ¶ 9), Joel Cendejas had no advance notice that the 12 Program would be broadcast (see Joel Cendejas Decl. ¶ 8), and G&G submits no 13 evidence suggesting that Jose or Jesus had any knowledge that the DirecTV account at

14 issue was a personal account that was not authorized to broadcast the Program at the 15 restaurant. Outside of the unverified allegation in Defendants’ response brief that 16 “Arturo ordered the program” in the name of his friend, Adrian Martinez (see Resp. at 2), 17 and Jesus’s recollection that Arturo “want[ed] to buy a pay-per-view for a boxing match,” 18 (Jesus Cendejas Decl. ¶ 9), there is also no evidence in the record regarding who Adrian

19 Martinez is or who, specifically, ordered the Program. This evidence is sufficient to 20 create a genuine dispute of material fact regarding whether Joel and Jesus Cendejas “had 21 supervisory power over the infringing conduct” and were “moving active conscious 22 // 1 force[s] behind the infringing act.” Walia, 2011 WL 902245, at *3 (citations and internal 2 quotations omitted).

3 Further, G&G’s evidence that Jesus and Joel Cendejas “had an obvious and direct 4 financial interest in [the infringing] activities” is conclusory. See id. G&G merely 5 alleges that because Joel and Jesus Cendejas are members of Single, LLC—which owns 6 Arturo’s Mexican Restaurant—that they had a direct financial interest in showing the 7 Program without authorization. (See Reply at 4-5.) In order to show the requisite 8 financial interest, however, G&G must show that Joel and Jesus “derived direct financial

9 benefit from the infringing conduct above and beyond a generic linkage between the 10 profits of the shareholder and those of the LLC.” Walia, 2011 WL 902245, at *3. Joel 11 and Jesus Cendejas both specifically deny that they made any additional money off the 12 Program (see Joel Cendejas Decl. ¶ 12; Jesus Cendejas Decl. ¶ 12), and G&G does not 13 submit any evidence to rebut that showing. In fact, even the circumstantial evidence that

14 Arturo’s Mexican Restaurant and Single, LLC, profited off the Program is rather thin. 15 The only evidence in the record on that topic suggests that there was no cover charge at 16 the restaurant and there were only 10-15 people at the restaurant during the Program (see 17 Kemppainen Aff. at 1-2), which Joel and Jesus state was not a significant number of 18 customers for a Saturday night (see Joel Cendejas Decl. ¶ 12; Jesus Cendejas Decl. ¶ 12).

19 In sum, the court GRANTS in part and DENIES in part G&G’s motion for partial 20 summary judgment on Defendants’ liability under 47 U.S.C. § 605(a). The court 21 GRANTS G&G’s motion as applied to Single, LLC, but DENIES the motion as applied 22 // 1 to the individual liability of Joel and Jesus Cendejas based on the genuine disputes of 2 material fact identified above.

3 C. Trespass to Chattels 4 In its initial brief, G&G states that it seeks summary judgment on liability and 5 damages against all Defendants on its claim of trespass to chattels. (See Mot. at 10-11.) 6 On reply, however, G&G concedes that “Joel Cendejas has established there are material 7 facts in dispute about his liability for this tort.” (See Reply at 6.) G&G continues to 8 assert that Jesus Cendejas and Single, LLC, are liable for trespass to chattels. (See id. at

9 5-6.) Accordingly, the court DENIES G&G’s motion as it pertains to damages and 10 liability on G&G’s trespass to chattels claim against Joel Cendejas and turns to the merits 11 of the motion as applied to Jesus Cendejas and Single, LLC. 12 Trespass to chattels “is the intentional interference with a party’s personal 13 property without justification that deprives the owner of possession or use.” Sexton v.

14 Brown, 147 Wash. App. 1005, 2008 WL 4616705, at *5 (Wash. Ct. App. Oct. 20, 2008) 15 (unpublished) (citing Restatement (Second) of Torts § 217 (1965)).5 In order to sustain 16 an action for trespass to chattel, however, there must be “some actual damage to the 17 chattel.” See W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser & Keeton on Law of 18 Torts 87 (5th ed. 1984); see also Restatement (Second) of Torts § 218, cmt. e (1965)

19 (“[O]ne who intentionally intermeddles with another’s chattel is subject to liability only if 20

21 5 The court “may consider unpublished state decisions, even though such opinions have no precedential value.” Emp’rs Ins. of Wausau v. Granite State Ins. Co., 330 F.3d 1214, 1220 22 n.8 (9th Cir. 2003). 1 his intermeddling is harmful to the possessor’s materially valuable interest in the physical 2 condition, quality, or value of the chattel . . . .”); D. Dobbs, P. Hayden, & E. Bublick, The

3 Law of Torts § 60 (2d ed. 2015) (“To establish liability for trespass to chattels, the 4 possessor must show legally cognizable harm.”). Generally, there are three types of 5 cognizable harms for a trespass to chattels claim: “(1) actual dispossession, which 6 implies that the plaintiff’s access to the chattel is barred or substantially limited for 7 something more than a few moments; (2) physical harm to the chattel; or (3) physical 8 harm to the plaintiff or to someone or something in which the plaintiff had a legal

9 interest.” D. Dobbs, P. Hayden, & E. Bublick, The Law of Torts § 60 (2d ed. 2015) 10 (citations omitted). 11 Here, G&G appears to allege that the “chattel” at issue is the “exclusive right to 12 distribute a broadcast signal to commercial establishments.” (See Mot. at 11.) There 13 exists minimal, if any, published Washington case law on trespass to chattels claims

14 pertaining to satellite signals or signal distribution rights. Other federal courts in this 15 circuit have concluded, however, that the “‘[e]xclusive right to distribute a broadcast 16 signal to commercial establishments constitutes a “right to possession of property” for 17 purposes of conversion’ or its sister tort, trespass to chattel.” See J & J Sports Prods., 18 Inc. v. Gonzalez, No. 1:17-CV-00678-CL, 2017 WL 6945169, at *3 (D. Or. Sept. 19,

19 2017), report and recommendation adopted, No. 1:17-CV-00678-CL, 2018 WL 411341 20 (D. Or. Jan. 11, 2018) (quoting J & J Sports Prods., Inc. v. Paolilli, No. 1:11-cv-680 LJO 21 GSA, 2011 WL 6211905, at *3 (E.D. Cal. Dec. 14, 2011)). The court adopts that 22 interpretation here and further concludes that G&G has established that Single, LLC, 1 interfered with G&G’s exclusive distribution rights in a manner that caused actual 2 damage to the value of those rights by broadcasting the Program without authorization.

3 (See Gagliardi Decl. ¶¶ 9 (stating that the sublicense fee for Arturo’s Mexican Restaurant 4 would have been $2,500.00), 13 (stating that signal piracy costs G&G “millions of dollars 5 annually”).) Thus, G&G is liable for trespass to chattels. However, for the reasons set 6 forth above regarding the genuine disputes of fact that preclude the court from awarding 7 summary judgment to G&G on its Section 605 claim against Jesus Cendejas, see supra 8 § III.B, the court concludes that summary judgment is not warranted against Jesus

9 Cendejas on G&G’s trespass to chattels claim. 10 Although the court concludes that Single, LLC, is liable for trespass to chattels, 11 the court also concludes that G&G’s request for damages is premature. G&G’s claim 12 against Defendants under 47 U.S.C. § 605 targets the same underlying conduct that 13 G&G’s trespass to chattels claim targets—the unauthorized broadcast of the Program.

14 (Compare Compl. ¶¶ 22-32 with id. ¶¶ 38-39.) As such, awarding G&G damages on its 15 trespass to chattels claim without determining the measure of damages available under 16 Section 605 risks introducing duplicative damages awards or double damages. See G & 17 G Closed Circuit Events, LLC v. Antonio Montoya, No. C19-0665RSM, 2020 WL 18 3962113, at *5 (W.D. Wash. July 13, 2020) (“The Court finds that damages for trespass

19 to chattel are duplicative of the above award [under Section 605] and declines to add to 20 the $7,500 figure.”); Gonzalez, 2017 WL 6945169, at *4 (rejecting attempt to recover 21 damages for trespass to chattel and a violation of Section 605 because that would “award 22 Plaintiff two separate damages awards for the same underlying conduct”). Accordingly, 1 the court concludes that G&G has established the fact that it has incurred damages, but 2 the court declines to determine the amount of those damages at this time.

3 In sum, the court GRANTS in part and DENIES in part G&G’s motion for partial 4 summary judgment on its trespass to chattels claim. Specifically, as to liability, the court 5 DENIES G&G’s motion as it applies to personal liability for Joel and Jesus Cendejas and 6 GRANTS the motion insofar as it applies to liability for Single, LLC. As to damages, the 7 court GRANTS G&G summary judgment on the fact of damages but DENIES G&G’s 8 motion insofar as it seeks a damages award at this juncture of the case.

9 D. Joint Status Report 10 The court notes that Defendants have submitted evidence suggesting that the 11 parties have failed to promptly schedule and participate in a settlement conference in this 12 case. (See Resp. at 5; Jacobowitz Decl. (Dkt. # 24) ¶ 3.) Defendants’ protestations are 13 unrelated to the legal issues presented by G&G’s motion for summary judgment and, as

14 such, are not properly before the court. Nevertheless, the court is troubled by 15 Defendants’ representations. The court initially ordered the parties to participate in a 16 settlement conference by April 2, 2020 (see Sched. Order (Dkt. # 16) at 1) and extended 17 that deadline to June 12, 2020, after the parties failed to adhere to the original deadline 18 (see 5/11/20 Order (Dkt. # 19) at 5). Defendants now allege that the parties have flouted

19 the settlement conference deadline for a second time. (See Jacobowitz Decl. ¶ 3.) 20 Accordingly, the court ORDERS the parties to submit a joint status report within 30 days 21 of the filing date of this order that details the parties’ compliance or lack of compliance 22 with the deadlines in the court’s scheduling orders. (See Sched. Order; 5/11/20 Order.) 1 To the extent that the parties have fallen out of compliance with the court’s deadlines, the 2 court expects the parties to promptly rectify that oversight. The court also warns the

3 parties that future violations of court orders may result in sanctions. 5 For the reasons set forth above, the court GRANTS in part and DENIES in part 6 G&G’s motion for partial summary judgment (Dkt. # 20). The court also ORDERS the 7 parties to submit a joint status report within 30 days of the filing date of this order that 8 details the parties’ compliance or lack of compliance with the deadlines in the court’s

9 scheduling orders. 10 Dated this 30th day of September, 2020. 11 A 12 United States District Judge 14

15 16 17 18 19 20 21 22